Tyre makers’ body concerned over falling production

Our Bureau Kochi | Updated on January 13, 2018 Published on March 07, 2017

Sector hit by surge in Chinese radials, slowdown in commercial vehicle sector

Raising concern over the continued slide in truck and bus radial tyre production, the Automotive Tyre Manufacturers Association (ATMA) has said that the emerging situation has sent alarm bells ringing for the tyre industry.

From more that 5.5 lakh truck and bus radials in June last year, the production sharply declined by 20 per cent to 4.5 lakh radials in December 2016 as the economy slowed and dumping of Chinese radials went up, the latest data released by ATMA has revealed.

The truck & bus radial (TBR) tyres has been the fastest growing segment for the tyre industry accounting for two-thirds of the ₹35,000 crore investments made in recent years.

With new capacities going on stream and declining production, the industry is staring at the grim prospects of gross underutilisation of TBR capacities. Truck and bus tyres account for 55 per cent of the tyre industry’s revenues in India.

“It’s a tough environment for tyre manufacturing in India. The industry has been squeezed from both input and output sides. Indiscriminate surge in Chinese radials and slowdown in commercial vehicle sectors has been hurting the tyre production in India. Over the last one year, the industry has hardly grown in size and the top line is under pressure,” said KM Mammen, Chairman, ATMA.

The situation coupled with increasing cost of all inputs is severely affecting the viability of tyre companies. In view of excess capacities and continued surge in Chinese tyre imports, he said the industry is not in a position to pass on the increased cost of production.

ATMA in a communication to Commerce Ministry stated that contraction in manufacturing of tyres is a matter of grave concern and policy enablers need to be put in place for the growth of the industry and redeeming the investments made.

Contraction in tyre manufacturing is also a dampener for the rubber growers as the tyre industry consumes more than 65 per cent of the domestic natural rubber production, it said.

Published on March 07, 2017
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